How Distributed Power Enhances Energy Security

April 03, 2015

Deb Frodl is Global Executive Director, Ecomagination at GE.

Looking at the long history of electricity, our power systems have traditionally been constrained by dependence on large stationary power plants requiring years of permitting, planning, approval, and construction. Today, this status quo is being challenged by the emergence of distributed power technologies. Quite the opposite of conventional power plants, these systems are fast, mobile, flexible, and they’re improving the resiliency of our power grid. These technologies are efficient, can use alternative fuels, and are capable of providing customers with combined heat and power at efficiencies greater than 90 percent. If we can harness the full potential of distributed power, it’ll be good news for the country as a whole.

Distributed power technologies are part of GE’s Ecomagination portfolio—or our company’s commitment to developing technologies that reduce our consumption of natural resources while creating economic benefits for our customers. Ecomagination technologies and solutions are diverse, ranging from wind turbines to water filtration systems. However, in many ways, the most exciting part of Ecomagination are the “distributed power” technologies, which enable businesses and communities the ability to generate reliable and efficient power on or off the grid, anywhere, anytime.

Distributed Power technologies enable businesses and communities the ability to generate reliable and efficient power on or off the grid, anywhere, anytime.

Right now, GE’s distributed power technologies consist of the company’s aero-derivative gas turbines, and its Jenbacher and Waukesha gas engines, all of which use natural gas to generate mechanical and electrical power. GE’s groundbreaking solid oxide fuel cell (SOFC) technology, which generates electricity from fuel cells using advanced manufacturing techniques, will soon be available.

GE recently made a major commitment to distributed power technologies by creating a distinct distributed power business and intensifying our technology and commercial focus in this area. We believe the distributed power market is poised for strong global growth. Our analysis, presented in a recent GE white paper, indicates that annual distributed power capacity additions will grow from 142 GW in 2012 to 200 GW in 2020. That’s a 58 GW increase in annual capacity additions and represents an average annual growth rate of 4.4 percent.

Through the end of the decade, distributed power capacity additions will actually grow at a rate that is nearly 40 percent faster that global power demand.

During this period, investment in distributed power technologies will rise from $150 billion to $206 billion. As a point of reference, during this same period, global electricity consumption will rise from 20.8 to 26.9 terawatt-hours (TWh). This represents an average annual growth rate of 3.3 percent. Thus, through the end of the decade, distributed power capacity additions will actually grow at a rate that is nearly 40 percent faster that global power demand.

There are reasons to be excited about the growth of distributed power. Although distributed power is often viewed s an alternative to traditional, centralized power generation, it is, in fact, much more—this technology works hand in hand with existing infrastructure to create systems that can accommodate both distributed and centralized power generation. Over time, as power plants and transmission and distribution networks become more intelligent, thanks to industrial hardware and software systems, the net result will be “intelligent and integrated power systems.” These power systems will well-suited to a variety of different generation system sizes and optimized to meet the needs of different types of customers. Because they are better suited to their customers’ specific needs, they are more efficient and thus more environmentally friendly.

As it turns out, these intelligent and integrated power systems also have one additional feature: they are more resilient than traditional power networks. When we consider resiliency, we think of it as the ability of a system to minimize the impact of a shock and recover from it quickly. In the context of national power systems, this means keeping the lights on more often and restoring power as soon as possible after an unplanned natural disaster or human-made event. During these events, keeping the electric power system up and running is a matter of national security. The importance of protecting power systems has long been recognized and is currently a topic of intense interest, discussion and research in the United States and around the world.

An intelligent and integrated power system is more resilient in several ways:

First, the interconnection of both large and small generators on the same network creates built-in redundancy for critical facilities. If a large power plant experiences unplanned downtime, then distributed generators can be used to keep power flowing to critical facilities. This is not the same as backup power. If distributed power technologies are interconnected and if the distribution system has been upgraded to enable bi-directional power flow, then distributed power can be used to supply power to portions of the network, rather than just a single facility.

Second, an integrated and intelligent power system has a higher number of connections between facilities and power generators. The increased robustness of the distribution network makes the system more robust in the face of unplanned events, because power can be re-routed as necessary to keep the lights on.

Third, if the network is intelligent, this means that generators and wires have been integrated with information technology systems in a way that provides human controllers with the data and capability needed to understand and control the network in order to optimize the system and maintain proper functioning during unexpected events.

In the last decade, technology advances in both distributed power technologies and information technologies have kick-started the evolution from a traditional, central-station electricity network to an intelligent and integrated network with a combination of distributed and centralized power. This is good news for both the economy and the environment, because the emerging power system is more efficient and has a lower environmental impact than the Balkanized networks it is leaving behind.

What’s really interesting is this new power paradigm also has tremendous upside potential from an energy security perspective. When it comes to energy innovation, there’s nothing better than increasing the sustainability and resiliency of an energy source or system, all while reducing costs. Some people may be skeptical about the ability of technology to achieve all three goals simultaneously—but we believe otherwise. Indeed, creating technologies that are good for economy, the environment, and for society has been our focus ever since Thomas Edison developed the first commercially viable lightbulb in 1879.

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The Fuse is an energy news and analysis site supported by Securing America’s Future Energy. The views expressed here are those of individual contributors and do not necessarily represent the views of the organization.

Issues in Focus

Safety Standards for Crude-By-Rail Shipments

A series of accidents in North America in recent years have raised concerns regarding rail shipments of crude oil. Fatal accidents in Lynchburg, Virginia, Lac-Megantic, Quebec, Fayette County, West Virginia, and (most recently) Culbertson, Montana have prompted public outcry and regulatory scrutiny.

2014 saw an all-time record of 144 oil train incidents in the U.S.—up from just one in 2009—causing a total of more than $7 million in damage.

The spate of crude-by-rail accidents has emerged from the confluence of three factors. First is the massive increase in oil movements by rail, which has increased more than three-fold since 2010. Second is the inadequate safety features of DOT-111 cars, particularly those constructed prior to 2011, which account for roughly 70 percent of tank cars on U.S. railroads. Third is the high volatility of oil produced from the Bakken and other shale formations, which makes this crude more prone towards combustion.

Of these three, rail car safety standards is the factor over which regulators can exert the most control. After months of regulatory review, on May 1, 2015, the White House and the Department of Transportation unveiled the new safety standards. The announcement also coincided with new tank car standards in Canada—a critical move, since many crude by rail shipments cross the U.S.-Canadian border. In the words DOT, the new rule:

Since the rule was announced, Republicans in Congress sought to roll back the provision calling for an advanced breaking system, following concerns from the rail industry that such an upgrade would be unnecessary and could cost billions of dollars. The advanced braking systems are required to be in place by 2021.

Democrats in Congress have argued that the new rules are insufficient to mitigate the danger. Senator Maria Cantwell (D-WA) and Senator Tammy Baldwin (D-WI) both issued statements arguing that the rules were insufficient and the timelines for safety improvements were too long.

The current industry standard car, the CPC-1232, came into usage in October 2011. These cars have half inch thick shells (marginally thicker than the DOT-111 7/16 inch shells) and advanced valves that are more resilient in the event of an accident. However, these newer cars were involved in the derailments and explosions in Virginia and West Virginia within the past year, raising questions about the validity of replacing only the DOT-111s manufactured before 2011.

Before the rule was finalized, early reports indicated that the rule submitted to the White House by the Department of Transportation has proposed a two-stage phase-out of the current fleet of railcars, focusing first on the pre-2011 cars, then the current standard CPC-1232 cars. In the final rule, DOT mandated a more aggressive timeline for retrofitting the CPC-1232 cars, imposing a deadline of April 1, 2020 for non-jacketed cars.

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DataSpotlight

The recent oil production boom in the United States, while astounding, has created a misleading narrative that the United States is no longer dependent on oil imports. Reports of surging domestic production, calls for relaxation of the crude oil export ban, labels of “Saudi America,” and the recent collapse in oil prices have created a perception that the United States has more oil than it knows what to do with.

This view is misguided. While some forecasts project that the United States could become a self-sufficient oil producer within the next decade, this remains a distant prospect. According to the April 2015 Short Term Energy Outlook, total U.S. crude oil production averaged an estimated 9.3 million barrels per day in March, while total oil demand in the country is over 19 million barrels per day.

This graphic helps illustrate the regional variations in crude oil supply and demand. North America, Europe, and Asia all run significant production deficits, with the Middle East, Africa, Latin America, and Former Soviet Union are global engines of crude oil supply.